Policy number <<insert number>>

Version <<insert number>>

Drafted by BUDGET PLANNING
Approved byPOLICY
<<insert name>> Board on <<insert date>>
Responsible person <<insert name>> Scheduled review date <<insert date>>

Please note that this is a template policy for guidance only. For assistance in tailoring this
policy to suit your organisation, or for legal advice at a pre-agreed price or training in this
area, please do not hesitate to contact Moores to discuss how we can meet your needs.
Please call the NFP-Assist Legal Hotline on (03) 9843 0418 or email to
NFPassist@moores.com.au.

INTRODUCTION
The Board of [name of organisation] is responsible for overseeing the budget of the
organisation and for ensuring that the organisation operates within a responsible,
sustainable financial framework.
In line with this responsibility, the Board of [name of organisation] conducts a budget
planning process each year as part of its annual business planning.

PURPOSE
This policy is designed to set out the process for compiling, monitoring and reviewing [name
of organisation]’s annual budget.

POLICY
The Board of [name of organisation] conducts a budget planning process each year as part of
its annual business planning.
The organisation operates under a budget that must be flexible in responding to unforeseen
events, including possible reductions in cash flow, and therefore be regularly monitored and
reviewed.

Policies can be established or altered only by the Board: Procedures may be altered by the CEO.

DISCLAIMER: While all care has been taken in the preparation of this material, no responsibility is accepted by the author(s)
or Our Community, its staff, volunteers or partners, for any errors, omissions or inaccuracies. The material provided in
this resource has been prepared to provide general information only. It is not intended to be relied upon or be a substitute for
legal or other professional advice. No responsibility can be accepted by the author(s) or Our Community or its partners for any
known or unknown consequences that may result from reliance on any information provided in this publication.
AUTHORISATION
<Signature of Board Secretary>
<Date of approval by the Board>
<Name of organisation>

Policies can be established or altered only by the Board: Procedures may be altered by the CEO.

DISCLAIMER: While all care has been taken in the preparation of this material, no responsibility is accepted by the author(s)
or Our Community, its staff, volunteers or partners, for any errors, omissions or inaccuracies. The material provided in
this resource has been prepared to provide general information only. It is not intended to be relied upon or be a substitute for
legal or other professional advice. No responsibility can be accepted by the author(s) or Our Community or its partners for any
known or unknown consequences that may result from reliance on any information provided in this publication.
 BUDGET PLANNING PROCEDURES

Procedures number <<insert number>> Version <<insert number>>

Drafted by <<insert name>> Approved by CEO on <<insert date>>
Responsible person <<insert name>> Scheduled review date <<insert date>>

RESPONSIBILITIES
The Board of [name of organisation] has ultimate responsibility for overseeing the budget of
the organisation and for ensuring that the organisation operates within a responsible,
sustainable financial framework.
It is the responsibility of the [Finance Manager/Treasurer] to prepare all budgets and review
budgets in consultation with the Finance Committee.
The Finance Committee consists of:
 The Board Chair;
 The Board Treasurer;
 The CEO;
 The Finance Manager.

PROCEDURES

Preparation of the Budget

In April each year, the [Finance Manager/Treasurer] starts preparing the budget estimates as
part of the Business Plan for the financial year. The process includes:
 considering operational costs;
 setting payroll costs; and
 estimating income.
The initial budget estimates are based on the current expenditure projections to end of year,
plus Consumer Price Increments for salaries or relevant wage increases, revisions to
awards/contracts, and a 10% increase on operating expenses such as power, telephones, etc.
Policies can be established or altered only by the Board: Procedures may be altered by the CEO.

DISCLAIMER: While all care has been taken in the preparation of this material, no responsibility is accepted by the author(s)
or Our Community, its staff, volunteers or partners, for any errors, omissions or inaccuracies. The material provided in
this resource has been prepared to provide general information only. It is not intended to be relied upon or be a substitute for
legal or other professional advice. No responsibility can be accepted by the author(s) or Our Community or its partners for any
known or unknown consequences that may result from reliance on any information provided in this publication.
The Finance Committee shall be provided with information about how cost increases will be
absorbed or will lead to increases in service charges (e.g. membership fees).
The [Finance Manager/Treasurer] will present the draft budget for discussion at a Finance
Committee meeting. The Finance Committee may accept the estimates as presented or may
request variations, within the context of the Business Plan. A detailed report denoting reasons
for decisions should be attached to the draft budget for discussion.
The [Finance Manager/Treasurer] will then revise the draft and present the amended draft
budget at the next available Board meeting, usually in April but no later than end of May.
Once adopted by the Board, this becomes the official operating budget for [name of
organisation] for the following financial year, and all Board members and employees must
work within the financial limits stated or implied by this document.

Monitoring and Reviewing the Budget

The [Finance Manager/Treasurer] is responsible for monitoring the organisation’s
expenditure, reviewing the actual and budgeted expenditures, and reporting on the progress
of such expenditure.
Financial reports will be prepared each month showing the year-to-date expenditure and its
variation from the budget estimates, and indicating any increases or decreases in funding. A
detailed commentary should be attached to Board reports detailing reasons for variations and
recommendations for corrective action should that be required.
The [Finance Manager/Treasurer] will indicate what effect any variations will have on the
budget projections and provide this information to the CEO and the Board. The [Finance
Manager/Treasurer] will also report on any other financial matters that may be related to the
Business Plan.
Once adopted by the Board, the Amended Budget will become the new operating budget for
the remainder of that financial year.

RELATED DOCUMENTS
 [Name of Organisation] Business Plan
 Investment Planning Policy

AUTHORISATION
[Signature of CEO]
[Name of CEO]
[Date]

Policies can be established or altered only by the Board: Procedures may be altered by the CEO.

DISCLAIMER: While all care has been taken in the preparation of this material, no responsibility is accepted by the author(s)
or Our Community, its staff, volunteers or partners, for any errors, omissions or inaccuracies. The material provided in
this resource has been prepared to provide general information only. It is not intended to be relied upon or be a substitute for
legal or other professional advice. No responsibility can be accepted by the author(s) or Our Community or its partners for any
known or unknown consequences that may result from reliance on any information provided in this publication.